USDA Forecasts Increase in US Pork Production
USDA has estimated a 3% increase in US pork production in 2024 an additional 1% increase in 2025. US pork exports are expected to increase sharply in both 2024 and 2025 leaving domestic per capita pork supplies up just 1% this year and down 1% in 2025
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| US Pork Supply (Million Pounds) | 2024/2023 | 2024/2025 | |||||
| Annual | 2021 | 2022 | 2023 | 2024 | 2025 | % Change | % Change |
| Beg Stock | 467 | 446 | 504 | 471 | 445 | ||
| Production | 27,690 | 27,009 | 27,316 | 28,079 | 28,415 | 3% | 1% |
| Imports | 904 | 1,344 | 1,143 | 1203 | 1,230 | 5% | 2% |
| Exports | 7,026 | 6,338 | 6,818 | 7262 | 7,615 | 7% | 5% |
| End Stocks | 446 | 504 | 471 | 445 | 450 | -6% | 1% |
| Per Cap | 51.1 | 51.1 | 50.2 | 50.8 | 50.4 | 1% | -1% |
| Farm Price | $68 | $73 | $63 | $62 | $60 | 0% | -4% |
| USDA May 2024 Data | |||||||
USDA forecasts hog prices at farm level which is correlated with the CME deliverable hogs index, but not without modest deviation. Regressing the CME index as a function of the farm level price results in an R2 of 97% with a standard deviation of $3 per Cwt. The equation derived is CME index = 1.32 x farm level price +.50. For example on 05/10/24 farm level hogs were trading at an average $70 converted @ 1.32x 70+.5 = $93 which compares to the close for CME May hogs the same day @ $92.
We have included a scatter study with the annual average US market hog farm price (adjusted for inflation) as a function of the domestic pork supply per capita. Note that USDA’s May 2024 forecast has the price/supply function falling back to the relationship prior to 2021. We would be more comfortable adding $5 to $10 to the 2024 – 2025 USDA farm level hog price forecast.